Fines Archives - MasterCompliance

FINRA Enforcement: Bringing Cases Against Individual Brokers

Posted on December 13, 2022 by admin

On September 20th, FINRA released the podcast FINRA Enforcement: Bringing Cases Against Individual Brokers. This podcast provides background information on how the enforcement process works against individual registered representatives. Mr. Chris Kelly, Deputy Head of Enforcement, was the guest on the show. Below is a summary of key considerations and takeaways for Firm’s and Brokers. Type of Cases Brought Against Individual Brokers Mr. Kelly noted that there are a wide range of cases brought against an individual broker. These can include failure to report an outside business activity, private securities transactions (aka selling away from the firm), fraud, excessive and Read more about FINRA Enforcement: Bringing Cases Against Individual Brokers[…]

Private Placement Best Practices from FINRA Disciplinary Actions

Posted on August 19, 2022 by admin

FINRA (Financial Industry Regulatory Authority) publishes a monthly review of disciplinary actions taken against both firms and individuals. These disciplinary actions are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your Firm’s compliance programs or surveillance. Below is a list of a few recent actions related to unregistered offerings or private placements including links to learn more about each as well as key takeaways. Due diligence obligations in connection with private offerings- Torch Securities In summary, Torch Securities failed to establish and maintain WSPs reasonably designed to Read more about Private Placement Best Practices from FINRA Disciplinary Actions[…]

Merrill Mutual Fund Enforcement Lessons Learned

Posted on June 24, 2022 by admin

FINRA (Financial Industry Regulatory Authority) announced on June 2, 2022 that it ordered Merrill Lynch, Pierce, Fenner & Smith, Inc., to pay 15.2 million in restitution and interest to thousands of customers who purchased Class C mutual fund shares when Class A shares were available at a substantially lower cost. FINRA news releases are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your Firm’s compliance programs or surveillance. Below is a summary of the Merrill order, as well as key takeaways. Click here for the corresponding news Read more about Merrill Mutual Fund Enforcement Lessons Learned[…]

Crowdfunding Enforcement Lessons Learned

Posted on May 20, 2022May 20, 2022 by admin

FINRA (Financial Industry Regulatory Authority) announced on May 4, 2022, that it fined two FINRA registered funding portals, a combined $1.75 million for failing to comply with securities laws and rules designed to protect investors in the crowdfunding space. These news releases are useful tools to look for trends in enforcement, violations, and other sanctions. These trends can assist you in identifying weak areas in your Firm’s compliance programs or surveillance. Below is a summary of the Wefunder and StartEngine matters, as well as key takeaways. Click here for the corresponding news release. Summary of Findings from Wefunder Enforcement: From Read more about Crowdfunding Enforcement Lessons Learned[…]

Personal Trade Reviews

Posted on September 10, 2021September 10, 2021 by admin

Citigroup Global Markets Inc. was recently censured and fined $350,000.00 ([PDF] FINRA Case #2019064316401) for failing to have a supervisory system to ensure statements were reviewed timely, as well as not ensuring they were receiving paper statements for accounts at custodians for which they did not have a direct feed. Although this particular incident was a BD fine, this information should be helpful for RIAs as well. An RIA should be conducting personal trade reviews as a part of their Code of Ethics. Considerations The review and supervision of outside brokerage accounts isn’t news; however, it’s important to take a Read more about Personal Trade Reviews[…]

Investment Advisers Act: Know the Rules or Pay the Price

Posted on November 4, 2020 by SCM Communications

Knowing firm requirements as set forth in the Investment Advisers Act is essential, and learning from the mistakes of others in this area can be a valuable and motivating tool for striving for compliance in the financial services industry. In an atmosphere where Chief Compliance Officers (CCO) are being added to disciplinary proceedings, learning and taking immediate corrective action is the name of the game. No longer is the firm the only name blasted across SEC complaints; regulators will ensure that individuals are equally held responsible. Read More…